Parnell proposes more dam money, with contingency

Published on NewsOK Modified: February 20, 2014 at 9:50 pm •  Published: February 20, 2014

JUNEAU, Alaska (AP) — Gov. Sean Parnell has proposed an additional $32.7 million for the proposed Susitna-Watana hydro project, but that is contingent upon the Alaska Energy Authority securing land access permits required for field studies and other work.

AEA is the group pursuing the massive project between Anchorage and Fairbanks.

Parnell proposed the funding as part of his amended supplemental budget for the current fiscal year. The dam funding brings the total supplemental package — which typically includes unforeseen or unexpected costs — to about $86 million. This year's package also includes funding for things like fire suppression and disaster relief associated with flooding last year.

AEA had wanted $110 million to complete its initial study report and prepare its license application for the Federal Energy Regulatory Commission during the upcoming fiscal year. Parnell included $10 million in next year's budget, saying he wanted to see greater progress on the land access agreements.

Parnell's budget director, Karen Rehfeld, presented the budget amendments for this year and next to lawmakers on Thursday.

In the House Finance Committee, Rep. Lindsey Holmes, R-Anchorage, asked if putting the $32.7 million in the supplemental, versus next year's budget, was a bit of a "shell game," because it wouldn't count against any spending cap for next year. Rehfeld said if AEA gets the land access permits, it would have about $30 million left in existing appropriations. If Parnell's budget requests are approved, AEA would have an additional $42.7 million, which Rehfeld said should allow AEA to get through the next fiscal year.

If the project remains on track, there would need to be another year of funding to get to the licensing application period, she said. If that's successful, there would need to be money for pre-engineering or engineering.

Holmes said she wanted to dig into the details more to know how the money would be spent and if it should be in this year's budget or next year's.

Rep. Bryce Edgmon, D-Dillingham, said he wanted to know why so much money was going toward the project when it was still, in his view, sort of "still on the back of the napkin, in some respects." In recent years, the state has provided more than $170 million toward the project.

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